Funding still scarce for startups at Seed Hatchery's Investor Day

May 16, 2013 — Eric Mathews, president of LaunchMemphis and Seed Hatchery, introduces a startup founder during Investor Day at Studio On the Square. Six entrepreneurial hopefuls gave their pitch to a full auditorium of potential financial backers. (Brandon Dill/Special to The Commercial Appeal)

May 16, 2013 — Star & Micey band member Nick Redmond describes the potential for his social media-based band fundraiser, Soundstache, during Seed Hatchery’s Investor Day event at Studio On the Square. Six entrepreneurial hopefuls gave their pitch to a full auditorium of potential financial backers. (Brandon Dill/Special to The Commercial Appeal)

In a darkened theater at Malco Studio on the Square on Thursday, Memphis entrepreneurship took center stage.

During the third annual Seed Hatchery Investor Day, leaders of six startups did their best to woo financial backers and occasional unexpected acts drew applause from the standing-room-only audience.

Soundstache's Nick Redmond nailed a back-flip to conclude his presentation.

And Screwpulp's Richard Billings started his with a nod to Clark Kent and Superman by peeling off a suit coat to reveal a T-shirt emblazoned with his company's logo.

While the applause was abundant, there was one commodity still in short supply — cash.

First held in 2011, Investor Day offers graduates of the Seed Hatchery's 90-day boot camp program a venue to pitch their startups before potential investors. Each startup receives $15,000 in initial seed capital and founders participate in intensive training sessions during the three-month period leading up to Investor Day.

But despite the efforts of myriad mentors and organization leaders to get the startups investment-ready, only one company out of the dozen that went through the program in the first two years has received significant funding. Most of the other participants shelved their startups and a number of the founding entrepreneurs even moved to other cities.

And while no deals were announced on Thursday, organizers hope investors will step up this year.

"I've been involved from the beginning and I think this year there's a more aggressive call to action for investors," said Vic Gatto of Solidus Co. of Nashville, one of the sponsors. "Seed Hatchery is in its third year, there are quality teams, but I'm impatient with the lack of funding. It's frustrating."

Meanwhile, the Memphis organization that developed the Seed Hatchery program is changing its name. LaunchYourCity has become Start Co. The name change marks the third identity shift for the group since it started out as LaunchMemphis in 2008 and rebranded as LaunchYourCity a year ago.

The latest name, Start Co. co-president Andre Fowlkes emphasized, should provide a clearer image of the organization's goals, namely supporting startups. Memphis-based agency archer>malmo developed the new name and logo.

Unlike the first two Investor Days events that were held at the Memphis Bioworks conference center, this year's Seed Hatchery program was staged in the more casual environment of the movie theater.

And that provided a comfortable venue for the program that organizers hope will translate into more funding than in previous years.

Gatto encouraged investors to study the six startups and get in on the first round of funding for the technology-related companies. This year's participants are BetterFed, Boosterville, MentorMe, Musistic, Screwpulp and Soundstache.